Do I Need to Pay Interns?

If you are running a small business, employing interns for extra help may seem like a win-win situation. College students can gain valuable real world experience, and employers can have a few extra hands around at little or no cost. As competition in the job market increases, many young adults look to internships as a way to boost their resumes.

Interns have recently gotten much coverage in the media for filing lawsuits alleging that they were worked like employees and received no pay or educational experience. The most notable recent intern lawsuit concerns a class action suit that was filed by forty interns against the Olsen twins’ company “Dualstar Entertainment.” In this case, college students alleged that they were working fifty hours a week without pay or receiving educational benefit.

According to the Fair Labor Standards Act, an internship must be for the educational benefit of the intern. At an internship program, interns should be learning skills in their position that can be applied broadly, and not just specifically for use at that company. In order to qualify for an unpaid internship program, a company is not permitted to hire interns in lieu of paid employees. However, an intern is permitted to shadow paid employees to learn about what they do. Additionally, it should be understood by both parties that the internship is an unpaid position and there is no promise of a job at the end.

If the intern is doing work in the private sector, they should be paid minimum wage if the work they do benefits the company, according to standards set by the Department of Labor (DOL). However, non-profit organizations are generally exempt from DOL requirements for those who volunteer their time.

Employment law is one aspect of the legal considerations a business must contend with. If you have questions regarding legal rights and responsibilities as a business owner, contact an experienced business attorney. Call Bellavia Blatt, PC at (516) 873-3000 or (631) 224-7000.